Where am I feeling the impact of rising prices most?

Not every area that has seen large jumps from inflation are every day parts of life. For example, airline fares have risen by 34.1% since last year (1). This is unfortunate but not a part of the weekly experience for most individuals. On the other hand, Food is up 10.4%(1), which impacts everyone’s grocery bill and the restaurants we like to frequent. The point being, there are areas we can’t avoid the price jumps but other areas that are more recreational or non-essential.

Does my spending reflect my values?

Once we have a better handle on how inflation has impacted the necessities of our lives, we can begin to look at the extracurricular spending we do. With the ease of chip cards and digital wallets, it can be hard to notice where our extra money is going. By using those same bank statements we mentioned earlier,  we can evaluate where the rest of the money in our budget is going and look for any consistent themes. For example, do we spend a lot of money on going out to eat or self care? Or perhaps we’ve seen an increase in other areas such as extra gas for recreational vehicles. 

By reviewing these areas, we can start to see if our spending aligns with things that are actually important to us. Extra spending in restaurants could be associated with creating experiences with family or fostering other relationships that are important to us. Perhaps, an increase in self-care spending shows that we’re beginning to prioritize ourselves in the way we believe is important. Maybe the extra spending on gas is a result of making the most of opportunities to create memories. If so, we can stop being so hard on ourselves for spending money the way we are spending it. Often there can be a cloud of guilt if we’re not saving as much as we would like to save each month. That is why it becomes so important to evaluate where our money is actually going. If our spending is in fact frivolous and insignificant and eating away at our budget, it makes sense to make adjustments. However, if the spending aligns with things that we value and experiences we desire, then perhaps we’re using the money exactly for what it’s for: Life.

What am I trading?

Once you begin to look for value-based spending in your finances, it becomes easier to weigh the pros and cons of how you utilize your money. The simple question of “what am I trading by making this purchase” can help bring clarity on whether or not to move forward. Think about it this way, if you’re looking to buy more new items that you truly don’t need, what experience or opportunities are you trading away by spending your finances in this manner? Or if you’re spending hundreds of dollars a month in another area that is not truly important, how else could that money be utilized to create experiences for you or others you care about?

Mindset